In Costa Rica real estate agents/brokers don’ t have legal power to take care of the paper work necessary for the closing process of a real estate transaction, for this reason, along with the property search, you have to hire the services of a local attorney to represent your interests. The attorney will also be able to help you with immigration status paperwork, opening of bank accounts, opening of a local corporation, etc.
The costs of transferring a property is a common question that comes to mind when searching for property in Costa Rica. We will explain this in a very simple way, but please keep in mind that all questions related to legal matters have to be clarified directly with the attorney that will represent you in Costa Rica.
Transfer Tax, Stamps and Legal Fees:
Legal Fees: On average they are approximately 1.25%.
Transfer Tax and Stamps : On average 2.3%.
Although it is a technical issue, the breakdown is:
Transfer Tax 1.5%
National Registry Stamps 0.5%
Agricultural Stamp 0.1%
Fiscal Stamp 625 colones
Archive Stamp 20 colones
Lawyers Stamp 5000 colones
Municipal Stamp 0.2%
Closing Costs: 2.3% + 5645 colones plus Attorney Fees: 1.25%
Total Expenses: Approximately 3.5% of the final sales price.
It is important to take into account that there are always other costs, such as powers of attorney, minutes, etc. and it would be nice to point it out.
Other considerations:
- It is standard practice that the buyer covers the cost of the property tax and legal stamps that have to be paid at the Public Registry of Property in order to change the ownership of the property. On the other hand, it is also standard practice that buyer and seller will take care of the payment of each one’s attorney.
- The real estate commission is paid by the Seller. If more than one realtor is involved in the transaction, the total commission will be split among them.
- As part of the Due Diligence the buyer can carry out a survey of the property to confirm property limits. The cost of the service of a topographer can vary between $400 and $700 plus 13% sales tax, depending on the area of the property and its topographical conditions.
- A house inspection can also be required by the buyer, and this is normally carried out by an Engineer. The cost of this service can also vary depending on the size of the house and other installations around the house, and its location. The price can be somewhere between $500 and $800 plus 13% sales tax.
- Depending on the type of property and its size and number of units included in the transaction, the due diligence might require other inspections and they can vary between $300 and $500.
- Escrow services start at $400, again this will also depend on the amount of the transaction, up to 0.25% of the amount to be put in escrow.
- Some buyers will prefer to transfer the shares of the corporation into which the property is registered, but attorneys will normally recommend that the property is transferred into a clean new corporation. The cost of opening a corporation will vary between $500 and $1200 depending on the law firm’s table chart of services.
For additional clarifications please feel free to contact our attorney Lic. Gonzalo Rojas at grb(at)quatro(dotted)legal
